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Food security and agriculture mitigation in developing countries fao
1. Food Security and Agricultural
Mitigation in Developing Countries:
Options for Capturing Synergies
Food and Agriculture
Organization of the
United Nations
2.
3. Food Security and Agricultural
Mitigation in Developing Countries:
Options for Capturing Synergies
Food and Agriculture
Organization of the
October 2009 United Nations
4. Acknowledgements
This paper is the outcome of a collaborative effort between the Natural Resources
Management and Environment Department and the Economic and Social Development
Department of the Food and Agriculture Organization of the United Nations (FAO). The
authors include Wendy Mann, Leslie Lipper, Timm Tennigkeit, Nancy McCarthy and
Giacomo Branca of the FAO. Keith Paustian of Colorado State University prepared
material for Annex 7.2 on MRV approaches for agricultural mitigation.
FAO gratefully acknowledges the following colleagues who have contributed their
knowledge to the content of this paper: Ralph Ashton (Terrestrial Carbon Group), Martial
Bernoux (INRA/IRD), José Manuel Bulas Montoro (Mexican Senate), Bernard Giraud
(Danone), Keith Paustian (Colorado State University), Pete Smith (University of
Aberdeen) and Johannes Woelcke (World Bank), Andreas Wilkes (ICRAF) and David
Zilberman (University of California Berkeley). This paper has also benefited from the
active support of colleagues within FAO who also gave valuable contributions: Blanca
Amado, Louis Bockel, Jelle Bruinsma, David Colbert, Cesar Falconi, Theodor Friedrich,
Josef Schmidhuber, Christina Seeberg-Elverfeldt and Keith Wiebe.
FAO is most grateful to the Australian Government for financial support provided
towards the preparation, editing and printing of this publication.
2
5. This paper is being made available in draft form to facilitate consultation and
feedback on the text. A final version of the paper will subsequently be prepared for
distribution at UNFCCC COP 15 in Copenhagen
3
7. Table of contents
Executive summary 7
Acronyms and abbreviations 9
1 Introduction 10
1.1 The context 10
1.2 The paper 12
2 Synergies and trade-offs between agriculture mitigation and food security 13
2.1 Current state of food security 13
2.2 Global food needs to 2050 14
2.3 Changes in agricultural practices and their impacts on adaptation/food security 16
2.4 Agricultural mitigation options 17
2.5 Costs 22
2.6 Mitigation and food security: where and how can synergies be realized? 23
3 Enabling action on food security and climate change mitigation: financing options 26
3.1 Agricultural investment requirements vis-à-vis climate financing 26
3.2 MRV requirements for different financing options 29
3.2.1 National GHG inventory 29
3.2.2 MRV for NAMAs 31
3.2.3 MRV for crediting and trading approaches 31
3.2.4 MRV for support 32
3.3 Economics of MRV 32
3.4 Conclusions 33
4 Moving from negotiations to implementation: options for action 35
4.1 Anchoring agricultural mitigation at the international level 35
4.1.1 High level political commitment 35
4.1.2 Building international confidence in agricultural mitigation 35
4.1.3 Securing long-term financing and partnerships: in search of the champions 35
4.2 Anchoring agricultural mitigation at the country level 36
4.2.1 Ensuring nationally appropriate action 36
4.2.2 Prioritizing agricultural mitigation actions 36
4.2.3 Assessing potential institutions for a carbon value chain 38
4.2.4 Making the link to smallholders-what is needed? 38
4.2.5 Building confidence and readiness for implementation 39
4.3 Measuring, Reporting and Verification (MRV) requirements – part of a step-wise approach 40
4.4 Conclusions 40
5 Conclusions and recommendations 41
6 References 44
5
8. 7 Annexes 51
7.1 Synergies and trade-offs between agricultural mitigation and food security 52
7.2 Measuring, Reporting and Verification (MRV) requirements for agricultural mitigation 56
7.3 Ex-Ante Tool to assess mitigation benefits of investment projects 69
7.4 External implications of domestic agricultural mitigation policy 71
7.5 FAO sources of data relevant for measuring, reporting and verification (MRV)
of agricultural mitigation 74
7.6 Use of spatially referenced tools to map the opportunities for mitigation:
a FAO example from The State of Food and Agriculture (SOFA) 75
7.7 Technical background paper on Nationally Appropriate Mitigation Actions (NAMAs)
for developing countries in the context of agricultural land management 76
6
9. Executive summary
Two key challenges facing humanity today stem from changes within global food and climate
systems. The 2008 food price crisis and global warming have brought food security and
climate change to the top of the international agenda. Agriculture plays a significant role in
both and these two challenges must be addressed together, rather than in isolation from
each other.
Farmers will need to feed a projected population of 9.1 billion in 2050. Meeting this demand
together with challenges from climate change, bioenergy and land degradation puts
enormous pressure on the agricultural sector to provide food, feed and fibre as well as
income, employment and other essential ecosystem services. Making changes to
agricultural production systems, particularly amongst smallholders, is a key means of
meeting this objective. Such changes also have implications for adaptation and mitigation in
the agricultural sector.
The paper explores potential synergies between food security, adaptation and climate
change mitigation from land-based agricultural practices in developing countries, which
could help to generate the multiple benefits needed to address the multiple demands placed
on agriculture. It indicates promising mitigation options with synergies, options that involve
trade-offs, possible options for required financing, and possible elements in designing
country implementation processes.
Key conclusions of the paper include:
• A more holistic vision of food security, agricultural mitigation, adaptation and development
is needed if synergies are to be maximized and trade-offs minimized. This needs to be
mainstreamed into global agendas and national strategies for addressing climate change
and food security.
• Realizing the synergies and minimizing trade-offs between agricultural mitigation and
food security will require financing for up-front investments, opportunity costs and
capacity building. Current levels of agricultural investment are inadequate to meet these
and other costs.
• The magnitude of potential financing for terrestrial-based mitigation, relative to overall
investment requirements for agriculture, indicate that leveraging mitigation finance to
support climate smart agricultural development strategies and investments will be
necessary to capture synergies between mitigation, adaptation and food security.
• There is currently no consensus on measuring, reporting and verification (MRV) for
financing mechanisms, but decisions in this regard would affect the costs and viability of
different agricultural mitigation activities.
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10. The main recommendations of the paper are:
(1) Capturing synergies and managing trade-offs between food security and agricultural
mitigation can be part of the solution to these two challenges and governments may
wish to reflect this is the outcomes of the World Summit on Food Security in Rome and
United Nations Climate Change Convention (UNFCCC) Conference of the Parties
(COP15) in Copenhagen.
(2) The formulation and implementation of climate change and food security strategies,
should benefit from greater awareness of the potential synergies and trade-offs between
these two policy areas within the agriculture sector, and how they might be best
managed to generate multiple benefits rather than perverse outcomes.
(3) Capturing the potential of agricultural mitigation and its co-benefits will require new and
additional resources, multiple funding streams, innovative and flexible forms of
financing, and the unequivocal eligibility of agriculture, including soil carbon
sequestration, in existing and any new financing mechanisms.
(4) Beyond Copenhagen, possible next steps that Parties may wish to consider, include:
(i) A work programme on agriculture could be initiated within the UNFCCC Subsidiary
Body for Scientific and Technological Advice (SBSTA), with technical support
provided, inter alia, through already ongoing Intergovernmental Panel on Climate
Change (IPCC) - FAO cooperation. Such a work programme could address
methodological issues, including those related to reference levels, financing, and MRV.
A decision in this regard could be taken by the UNFCCC COP, at its fifteenth session
in Copenhagen.
(ii) A suite of country-led pilots could be launched to build readiness, confidence and
capacity for implementation of nationally appropriate agricultural mitigation action.
The modality of implementation could be a phased approach, linked to country-
specific capacities, circumstances and sustainable development processes.
8
11. List of acronyms
AAUs assigned amount units
AFOLU agriculture, forestry and other land use
BAP Bali Action Plan
BAU business as usual
C Carbon
CDM Clean Development Mechanism
CH4 Methane
CO2 Carbon Dioxide
CO2e Carbon Dioxide equivalent
COP Conference of the Parties
CSO civil society organization
ERs emission reductions
EU European Union
FAO Food and Ariculture Organization of the United Nations
GEF Global Environment Facility
GHG green-house gas
kcal kilocalories
IFAD International Fund for Agricultural Development
IPCC Intergovernmental Panel on Climate Change
LCA life cycle analysis
LDCs least developed countries
LULUCF land use, land-use change and forestry
MDGs Millennium Development Goals
MRV measurement, reporting and verification
N Nitrogen
N2O Nitrous Oxide
NAMA nationally appropriate mitigation action
NGO non-governmental organization
OECD-DAC Development Assistance Committee of the Organisation
for Economic Co-operation and Development
ODA official development assistance
PAMs Policies and Measures
PoA programme of activities
REDD Reduction of Emissions from Deforestation and forest Degradation
R&D research and development
SALM sustainable agricultural land management
SBSTA Subsidiary Body on Scientific, Technical and Technological Advice
SDPAMs sustainable development policies and measures
SNLT sector no-lose target
tCERs temporary certified emission reductions
UNFCCC UN Framework Convention on Climate Change
VCS Voluntary Carbon Standard
9
12. 1
Introduction
1.1 The context
Two key challenges currently facing humanity stem from changes occurring within global
food and climate systems. The food price crisis of 2008 and already discernable signs of
global warming, which are thought to be symptomatic of deeper and longer term changes,
have brought food security and climate change to the apex of the international agenda.
Agriculture has significant roles in both, underlining the need to address the two challenges
together, rather than in isolation from each other.
Article 2 of the United Nations Framework Convention on Climate Change (UNFCCC) states
that the ultimate objective of the Convention is:
“..stabilization of greenhouse gas concentrations in the atmosphere at a level that
would prevent dangerous anthropogenic interference with the climate system.
Such a level should be achieved within a time-frame sufficient to allow
ecosystems to adapt naturally to climate change, to ensure that food production
is not threatened and to enable economic development to proceed in a
sustainable manner.”
It is widely held that achievement of this objective will entail: 1) more ambitious commitments
by developed countries to reduce emissions; and 2) internationally supported nationally
appropriate mitigation action by developing countries. In line with the Convention, both
should be done in ways that 1) do not negatively affect development processes; 2) adhere
to the parameters outlined in Article 2 above and 3) respect common but differentiated
responsibilities and capabilities. Decisions to be taken by Parties, currently negotiating a
Copenhagen outcome, are to shape how such commitments might be pursued and such
action implemented and supported.
The objectives of this paper are to provide information on the potential of land-based
agricultural systems to contribute to meeting the ultimate objective of the Convention and to
identify options for actions for enabling this contribution.
Agriculture is the major economic sector of many developing countries and most Least
Developed Countries (LDCs). It is the main livelihood of 75 percent of the poor in
developing countries. Farmers constitute the largest group of natural resource managers
on earth (land, water, domesticated genetic resources). Agriculture is expected to feed a
population that will number 9.1 billion in 2050, while providing income, employment and
environmental services. Responding to more rapid and intense climate changes is
additional to these other demands on the sector and follows decades of declining
investment in the sector and a global financial crisis.
At the same time, agriculture is an important source of greenhouse gas (GHG) emissions,
representing 14 percent of the global total. Developing countries are the source of
74 percent of these emissions (Smith et al. 2008). If related land-use change, including
deforestation (for which agriculture is a key driver) and emissions beyond the farmgate are
considered, the sector’s share would be higher. The technical mitigation potential of
agriculture is high and 70 percent of this potential could be realized in developing countries.
From 1990 to 2005, emissions from agriculture in developing countries increased 32 percent
and are expected to continue to rise, driven by population increases and changes in diet.
10
13. Agricultural systems can contribute significantly to overall mitigation that will help to reduce
the extent of adaptation required and catastrophic impacts on systems and sectors, on
which lives and livelihoods depend. Agricultural systems will also need to adapt to
unavoidable climate change impacts in order to ensure food security and sustainable
development. Most developing countries will need to do both and will need to involve
smallholders.
Many agricultural mitigation options, particularly those that involve soil carbon (C)
sequestration (which is 89 percent of the technical mitigation potential of agriculture), also
benefit adaptation, food security and development, referred to as co-benefits. These options
involve increasing the levels of soil organic matter, of which carbon is the main component.
This would translate into better plant nutrient content, increased water retention capacity
and better structure, eventually leading to higher yields and greater resilience. These
agricultural mitigation options can be pursued in the context of, and without adverse affects
to, national sustainable development processes. They can also contribute to implementation
of Article 2 of the Convention.
However, some of these options involve difficult trade-offs, with benefits for mitigation but
negative consequences for food security and/or development. For example, biofuel
production provides a clean alternative to fossil fuel but can displace or compete for land
and water resources needed for food production. Restoration of organic soils enables
greater sequestration of carbon in soil, but may reduce the amount of land available for food
production. Restoration of rangelands may improve carbon sequestration but involves short-
term reductions in herder incomes by limiting the number of livestock. Some trade-offs can
be managed through measures to increase efficiency or through payment of
incentives/compensation. Other options may benefit food security or agricultural
development but not mitigation.
The imperative to increase sustainably the productivity and resilience of agricultural
production systems, while contributing to emission reductions, follows decades of declining
investment in the sector and a global financial crisis. New and additional resources will be
needed to cover additional requirements, such as: formulation/implementation of national
agricultural mitigation strategies, incentives for adoption of mitigation options by rural
producers, and readiness/confidence/capacity building, including the use of technologies
and methodologies for MRV of both action and support. More innovative financing will also
be required, drawing on multiple funding streams, integrating new mitigation financing with
existing official development assistance (ODA) and utilizing a range of financing mechanisms
from public sector funds to market-based mechanisms. Above all, financing mechanisms,
will need to be inclusive of, and appropriate to, the specificities of agriculture, including the
multiple benefits of synergies offered through soil carbon sequestration in particular. This
applies to both newly created financial mechanisms or reformed existing, and the two are
not mutually exclusive.
While the profile of agriculture within the climate change negotiations has improved slightly,
although currently not mentioned under adaptation, it is still considered to be a difficult sector.
Two steps could help to bring agriculture into the mainstream of mitigation action. First, a
work programme on agriculture could be placed within the UNFCCC SBSTA. Such a work
programme could address methodological issues related to reference levels, financing, and
MRV. Second, a suite of country-led pilots could be considered to build readiness for
implementation through a phased approach linked to country capacities and circumstances.
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14. 1.2 The paper
This paper is situated between two important international gatherings on the twin challenges
of food security and climate change: the World Summit on Food Security (Rome, November
2009) and the UNFCCC COP 15 (Copenhagen, December 2009). It underlines the need for
more interrelated solutions to these interrelated challenges. The paper addresses
possibilities for maximizing synergies (mitigation and co-benefits) and minimizing trade-offs,
as well as relevant financing options and their MRV requirements. Finally, it suggests
possible steps at the international and national levels to enable country-led implementation
processes. The paper should be seen as the beginning of a process of exploring issues
related to the development of synergistic nationally appropriate mitigation action in the
agriculture sectors of developing countries.
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15. 2
Synergies and trade-offs between agriculture
mitigation and food security
Meeting the food demands of a global population expected to increase to 9.1 billion by
2050, and improving incomes and livelihoods to enable access to food, will require major
improvements in agricultural production systems. At the same time, agricultural mitigation
has the potential to enhance removals and reduce emissions. The questions addressed in
this chapter are 1) the extent to which there are potential synergies or trade-offs in the
changes in production needed to meet global food security objectives and those needed
to increase mitigation from the agricultural sector; and 2) identifying means of enabling
actions that contribute to both objectives.
2.1 Current state of food security
The World Food Summit in 1996 adopted the following definition of food security: “Food
security exists when all people at all times have physical or economic access to sufficient,
safe and nutritious food to meet their dietary needs and food preferences for an active and
healthy life” (FAO 1996). FAO’s State of Food Insecurity report (2002) refers to four elements
of food security: food availability, food accessibility, food utilization and food system stability.
Availability focuses on food production whereas accessibility focuses on the ability of people
to obtain food, either through production, purchase or transfers. Food utilization focuses on
the nutritional value of food, the interaction with physiological condition and food safety.
Food system stability focuses on stability of supply and access, as well as the ability to
respond to food emergencies.
As captured in the 2008 State of Food Insecurity report, there are nearly one billion people
who are undernourished. As shown in figure 2.1, the overall proportion of the population
suffering from undernourishment in sub-Saharan Africa remains persistently high at
30 percent, and is over 50 percent in some countries. Undernourishment also affects
more than a fifth of the population of South Asia (21%), and many Caribbean countries
(23%) (FAO 2008b).
Food accessibility for many people in the developing countries remains closely tied to local
food production (FAO 2008a,b; Bruinsma 2009). The World Development Report 2008
stresses the importance of agriculture-led growth to increase incomes and reduce poverty
and food insecurity in the least developed and developing countries. Countries with large
food insecure populations are often also those whose agricultural systems are highly
vulnerable to climate shocks now, particularly in sub-Saharan Africa and South and
Southeast Asia (Gregory et al. 2005).1 Given the close link between local production and
food insecurity, investments in the agricultural sector that increase food availability and
strengthen the resilience of the food production system will have immediate positive impacts
on all elements of food security in food insecure regions.
1 As noted by many authors, global food production is sufficient, at the moment, to cover global consumption
needs (c.f. FAO, 2008b). However, trade in agricultural products is still quite low, at approximately 16% (FAO,
2008a), so that national consumption remains closely – though not perfectly – linked to national production. It is
important to note that accessibility by the poor at the local level largely depends on income, and incomes are
affected by more than simply agricultural output.
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16. Figure 2.1: FAO World Hunger Map
2.2 Global food needs to 2050
Although the rate of global population growth is declining, the UN projects that total
population will increase by more than 30 percent by 2050 (UN 2009), i.e. from the current
6 billion to approximately 9.1 billion in 2050. Most of the increase is projected to occur in
South Asia and sub-Saharan Africa. Both regions have a large share of the world's food
insecure population, dependent on agriculture for their livelihoods.
FAO projects that global agricultural production will need to grow by 70 percent overall by
2050 (Bruinsma 2009). These projections are based on assumptions about population and
income growth as well as dietary patterns. Under the baseline scenario2, per capita calorie
availability is projected to increase 11 percent by 2050, to an average of 3130 kcal/per
capita. Under this scenario, 4 percent of the developing world population would still be food
insecure.3
There are three main means of increasing agricultural production to meet projected
increases in demands: 1) bringing new land into agricultural production; 2) increasing the
cropping intensity on existing agricultural lands; and 3) increasing yields on existing
agricultural lands. Adoption of any one of these strategies will depend upon local availability
of land and water resources, agro-ecological conditions and technologies used for crop
production, as well as infrastructural and institutional development.
Using the FAO 2006 baseline demand projections, Bruinsma (2009) calculates the potential
sources of agricultural supply response by region and for the main categories of production
increase. The analysis, however, excludes any explicit impacts of climate change on
agricultural production and assumes that land for biofuels produced domestically remains at
2008 levels4. The study assumes that the bulk of foods consumed will be produced locally,
2 Described in FAO 2006.
3 This result is based upon an assumption of shifts in dietary patterns involving an increase in the share of high
value foods and meat consumed as incomes rise. Lower calorie content and inefficiency associated with conversion
of feed grains to meat calories translates into reduced increases in caloric availability per increase of agricultural
production. Actual experience with income growth and dietary transformation could vary from this projection, which
would in turn affect the needed supply response from agriculture – however in this report we will use this as the
base case.
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17. based on the observation that only 16 percent of world production enters international trade
at present. Given these assumptions, a detailed investigation was conducted of present and
future land/yield combinations for 34 crops under rainfed and irrigated conditions in
108 countries and country groups. This analysis yields a baseline projection of potential
sources of agricultural production growth by region for the three main categories of supply
response as shown in table 2.1 below.
Seventy-five percent of the projected growth in crop production in developing countries comes
from yield growth and 16 percent from increases in cropping intensity. Arable land expansion is
found to be an important source of growth in sub-Saharan African and Latin America. These
results highlight the potential tensions that may be created between the need to increase food
production and possible transitioning towards sustainable, low emission agriculture strategies if
viable opportunities are not developed to enable meeting both goals.
Despite several caveats associated with these assessments, the analysis is a useful point of
departure for understanding the scope and magnitude of changes needed in agricultural
production systems5. It can be expanded to include information from other studies on
factors that could change the nature of the agricultural supply response. While there are
many factors, three are particularly important: potential impacts of climate change on
agricultural production, the effects of environmental degradation, and the potential effects of
future biofuel development.
Climate change can impact agricultural production and supply response via changes in
temperature and precipitation that in turn affects which crops can be grown and when, as
well as potential yields. Several studies conclude that in the near term (e.g. to 2050)
relatively limited changes in temperatures and precipitation are expected to limit negative
impacts on global agricultural production (Fischer et al. 2007; Schmidhuber and Tubiello
2007; Cline 2007). Over this period climate change could even have a positive impact in
some areas due to carbon dioxide (CO2) fertilization effects. However, Lobell et al. (2008)
predicted that productivity of many important staple crops may decline by 2030 in high
food insecure regions, particularly in Southern Africa and South Asia. After 2050, large
Table 2.1: Projected sources of growth in crop production to 2050 (Percent)
Arable land Increases in Yield increase
expansion cropping intensity
All developing countries 21 10 69
sub-Saharan Africa 25 7 68
Near East/North Africa -7 17 89
Latin America and Caribbean 30 17 53
South Asia 6 9 85
East Asia 2 16 81
World 9 16 75
Source: Bruinsma 2009, Baseline Scenario
4 80-85 million tonnes of cereals for ethanol production (mostly maize in the US) and 10 million tonnes of vegetable
oil for biodiesel production in the EU.
5 Missing or poor data required expert judgment to fill gaps on productivity and cropping intensities and problems
in assessing the suitability of land use change for agriculture including lack of consideration of alternative uses such
as forests, protected areas and human settlements. In addition, biophysical and socio-economic constraints to
development may not be well reflected in suitability estimates, which may result in overestimates of the potential for
arable land expansion. Bruinsma (2009) notes that land suitability for specific crops is more realistic than developing
an overall suitability index due to these problems. In addition, potential changes in land quality (e.g. either
rehabilitation of degraded lands or increases in degradation on existing lands), water scarcity, climate change
impacts and biofuel expansion, which could affect yield growth and cropping intensity, are not explicitly included.
15
18. decreases in agricultural production are projected. For instance, building on assessments of
six climate models and two crop modelling approaches, Cline (2007) concludes that global
agricultural output could decrease between 6-16 percent by 2080, assuming a 4.4 degree
increase in temperature and 2.9 percent decrease in precipitation, depending on the effects
of CO2 fertilization. UNEP (2009) identified increasing water scarcity arising from increased
glacier melt as another potential source of agricultural production decline, leading to
potential agricultural yield reductions of 1.7-12 percent by 2050 globally. Changes in pest
and disease patterns could also significantly impact agricultural production (Lobell et al.
2008). South Asia and parts of sub-Saharan Africa are expected to be hardest hit in both
the near and longer term, with decreases in agricultural productivity between 15-35 percent
(Stern 2006; Cline 2007; Fisher et al. 2002; IPCC 2007).
Continued land degradation and water scarcity – even in the absence of climate change –
could also have major impacts on future agricultural supply response. Salinization of soils,
nutrient depletion and soil erosion all reduce the productivity of lands for agricultural
production. In cases of advanced degradation, lands become unsuitable for agricultural
production. Overall, UNEP estimates a loss of 0.2 percent in cropland productivity per year
globally due to unsustainable agricultural practices (UNEP 2009).
Bio-energy constitutes a further challenge to the agricultural sector, representing the largest
source of new demand for agricultural commodities in recent years. Production of biofuels,
particularly ethanol and bio-diesel for use in the transport sector, has tripled since 2000 and
is projected to double again within the next decade. Fischer et al. (2007) find that
expansion of first generation biofuels is likely to continue to compete with food production
for land and water resources, with potentially significant negative impacts on food
insecurity. However, second generation biofuel development could decrease competition
for arable land use from biofuels, indicating the importance of research and development
in this area (Fischer et al. 2007; Kahn and Zaks 2009).
While impacts on mean agricultural production by 2050 are expected to be limited outside
of Southern Africa and South Asia, nearly all researchers conclude that increased climate
variability and extreme weather events are projected to increase even in the near term,
affecting all regions (c.f. Lobell et al. 2008, IPCC 2001 & 2007, Rosenzweig and Tubiello
2006). For instance, Antle et al. (1999) simulated changes in dryland grain production in
Montana due to projected climate changes; model results show that impact on mean
returns by 2030 were ambiguous (-11% to +6%), but that variability increased under all
scenarios – both with and without adaptation. Many developing countries are already
vulnerable to weather shocks, and without significant investments in agriculture, future
climate changes will increase this vulnerability (Parry et al. 2007). Thus, increasing the
resilience of agricultural systems is a key means of adapting to climate change as well as
increasing food security.
2.3 Changes in agricultural practices and their impacts on
adaptation/food security
The next three sections of this chapter focus on a set of changes in agricultural land uses and
their implications for food security, adaptation and mitigation. A consistent set of land use
changes has been used, based on the main categories for terrestrial mitigation options from
agriculture, identified by IPCC 2007, to assess their impacts on food security, adaptation and
mitigation. It is striking that, to a very large extent, the land use changes needed to improve
food security and adaptation are the same as those that generate mitigation.
16
19. This section starts by assessing the impact of land use changes on the level and stability
of food production, the two components of food security directly linked to land use and
management6. Table 2.2 below provides a list of potential changes in agricultural systems
that have been proposed to increase agricultural production, as well as to decrease
output variability due to climate variability and extreme climate events. Many of these
options overlap with those proposed for adaptation to climate change, notably options
that increase system resilience and reduce impacts of climate events on food production.
A more detailed version of the table is provided in annex 7.1
An important point captured in the table is that impacts on food production can vary in the
short versus long-run. For several options, short term impacts may be negative depending
on underlying agro-ecological conditions, previous land use patterns, and current land use
and management practices. Long-term impacts are expected to be positive for increasing
both the average and stability of production levels. For instance, crop and grassland
restoration projects often take land out of production for a significant period of time, reducing
cultivated or grazing land available in the short run, but leading to overall increases in
productivity and stability in the long run. A different type of trade-off may occur with
incorporating crop residues that are expected to increase soil fertility and water retention
capacity, thereby increasing yields at least over the medium-long term. However, where
livestock are an important component of the food production system, there is a potential
trade-off between residues used for the food crop system versus for livestock feed (Giller et
al. 2009). This does not mean that conservation agriculture cannot be successful in areas
facing these trade-offs, but rather that local farmers, researchers and extensionists must find
ways to directly address these trade-offs.
While there can be trade-offs in terms of average yearly food production in the short term,
there are fewer identified negative impacts on yield variability. However, yield variability can
increase in the short term where changes in activities require new knowledge and
experience, and farmers unfamiliar with such systems require a period to successfully adopt
the practice (e.g. fertilizer application or the construction of water retention structures where
incidence and severity of both droughts and floods are expected to increase in the future).
2.4 Agricultural mitigation options
In this section, the mitigation impacts of land use changes are assessed. The major sources
of terrestrial mitigation from agriculture, following IPCC (2007) are described below.
Cropland management
• Improved agronomic practices generate higher inputs of carbon (C) residue, leading to
increased soil C storage (Follett et al. 2001). Such practices include using improved crop
varieties, extending crop rotations, avoiding use of bare fallow and using cover crops.
• Integrated nutrient management can reduce emissions on-site by reducing leaching and
volatile losses, improving nitrogen (N) use efficiency through precision farming7 and
improving fertilizer application timing.
• Increasing available water in the root zone through water management can enhance
biomass production, increase the amount of above-ground and the root biomass
returned to the soil, and improve soil organic C concentration. Soil and water
conservation measures, such as the construction of soil or stone bunds, drainage
measures, and irrigation constitute important aspects of water management.
6 Adaptation options, which do not directly affect land use, include improved climate forecasting and their
dissemination, altering timing of planting/harvesting, and developing weather-based insurance schemes (FAO
2008d, Howden et al. 2007).
17
20. Table 2.2: Food production and resilience impacts of changes in agricultural production systems
Food Security/Adaptation Options Impacts on Food Production
Positive Negative
Cropland management
Improved crop varieties Generally increased crop yield
Improved crop/fallow rotations Higher yields due to increased Reduced cropping intensity may compromise
soil fertility household food security in short-run
Use of legumes in crop rotations Higher yields due to increased N in soil Reduced cropping intensity may compromise
household food security in short-run
Use of cover crops Higher yields due to reduced on-farm May conflict with using cropland for grazing
erosion and reduced nutrient leaching in mixed crop-livestock systems
Increased efficiency of Higher yields through more efficient use
N fertilizer/manure use of N fertilizer and/or manure
Incorporation of residues Higher yields through increased soil Potential trade-off with use as animal feed
fertility, increased water holding capacity
Reduced/zero tillage Higher yields over long run, particularly May have limited impacts on yields in short-
where increased soil moisture is valuable term; weed management becomes very
important; potential waterlogging problems
Live barriers/fences Higher yields Reduced arable land
Perennials/agro-forestry Greater yields on adjacent croplands from Potentially less food, at least in short-term,
reduced erosion in medium-long term, if displaces intensive cropping patterns
better rainwater management;
Water Management
Irrigation Higher yields, greater intensity of land use
Bunds Higher yields, particularly where increased Potentially lower yields when extremely
soil moisture is key constraint high rainfall
Terraces Higher yields due to reduced soil and May displace at least some cropland
water erosion, increased soil quality
Pasture and Grazing Management
Improving forage quality and Higher livestock yields and higher
quantity quality forage
Seeding fodder grasses Higher livestock yields due to greater
forage availability
Improving vegetation community Greater forage/fodder in medium-long term May reduce forage/fooder in short-term
structure
Stocking rate management Potential increased returns per unit of Returns at the herd level may decline, at
livestock least in the short term
Rotational grazing Higher livestock yields due to greater Short-term losses likely if rotational system
forage availability and potetentially greater supports fewer head of livestock
forage quality
Restoring Degraded Lands
Re-vegetation Improved yields when crops are sown in
the medium-long run; improved yields on
adjacent crop or grassland due to reduced
wind, soil and/or water erosion
Applying nutrient amendments Improved yields when crops are sown in
(manures, bio-solids, compost) the medium-long run
18
21. Impacts on Yield Variability and Exposure to Extreme Weather Events
Positive Negative
Reduced variability where varieties
developed for resilience
Reduced variability due to increased soil
fertility, water holding capacity
Reduced variability due to increased soil
fertility, water holding capacity
Lower variability more likely where good Potentially greater variability with frequent droughts
drainage and drought infrequent; experience
can reduce farm-level variability over time
Reduced variability due to increased soil
fertility, water holding capacity
Reduced variability due to reduced
erosion and improved soil structure,
increased soil fertility
Reduced variability
Reduced variability of agro-forestry and
adjacent crops
Reduced variability in well-functioning systems
Reduced variability in dry areas with low May increase damage due to heavy rains, when
likelihood of floods and/or good soil drainage constructed primarily to increase soil moisture
Reduced variability due to improved soil
quality and rainwater management
Reduced variability where improved forage is Potentially increased variabilty where improved
adapted to local conditions forage is more sensitive to climate conditions
than natural pasture
Reduced variability where seeded fodder is Potentially increased variabilty where improved
adapted to local conditions seeded fodder is more sensitive to climate
conditions than natural pasture
Reduced variability due to improved soil
structure, reduced erosion
Potentially lower variability in long-term, where
forage availability is key factor in livestock
output variability
Potentially lower variability in long-term, where
forage availability is key factor in livestock
output variability Sources: Antle et al. 2007,
Baudeon et al. 2007, Dutilly-
Diane et al. 2003, FAO 2007,
Freibauer et al. 2004, Giller
Reduced variability in local landscape due to et al. 2009, Kwesiga et al.
reduced wind, soil, and/or water erosion 1999, Lal 2004, Niles et al.
2002, Nyende et al. 2007,
Pretty and Hine 2001, Pretty
et al. 2003, Pretty et al.
2006, Rosenzweig and
Tubiello 2007, Smith et al.
2008, Verchot et al. 2007.
19
22. • Tillage management practices with minimal soil disturbance and incorporation of crop
residue decrease soil C losses through enhanced decomposition and reduced erosion8.
Systems that retain crop residues tend to increase soil C because these residues are the
precursors of soil organic matter.
• Agro-forestry systems increase C storage and may also reduce soil C losses stemming
from erosion. Options include combining crops with trees for timber, firewood, fodder and
other products, and establishing shelter belts and riparian zones/buffer strips with woody
species9.
Improved grassland management
• Improved productivity through increasing nutrients for plant uptake and reducing the
frequency or extent of fires (e.g. improvements in forage quality and quantity, seeding
fodder grasses or legumes with higher productivity and deeper roots, reducing fuel load
by vegetation management).
• Improved grazing management by controlling intensity and timing of grazing (e.g.
stocking rate management10, rotational grazing, and enclosure of grassland from
livestock grazing).
Management of organic soils11
• Draining organic soils for cultivation leads to high GHG emissions. Avoiding drainage is
the best option in terms of reduced GHGs; other practices to minimize emissions include
avoiding row crops and tubers, avoiding deep ploughing, and maintaining a shallower
water table (Freibauer et al. 2004).
Restoration of degraded lands
• Carbon storage in degraded lands can be partly restored by practices that reclaim soil
productivity (Lal 2004a) (e.g. re-vegetation; applying nutrient amendments and organic
substrates such as manures, bio solids, and composts; reducing tillage and retaining
crop residues; and conserving water).
7 Judicious nutrient management is crucial to humification of C in the residue and to Soil Organic Carbon (SOC)
sequestration. Soils under low-input and subsistence agricultural practices have low SOC content which can be
improved by judicious use of inorganic fertilizers, organic amendments and strengthening nutrient recycling
mechanisms (Lal and Bruce 1999). Also, the use of organic manures and compost enhances SOC pool more than
application of the same amount of nutrients as inorganic fertilizers. A combination of integrated nutrient
management and precision farming, farming by soil or soil-specific management (i.e. application of nutrients and
water as required for the specific soil conditions) can enhance SOC concentration, use efficiency of inputs and soil
quality (Leiva et al. 1997).
8 For example, conservation tillage (CT) is defined as any method of seedbed preparation that leaves at least 30%
of ground covered by crop residue mulch (Lal 1997).
9 The standing stock of carbon above ground is usually higher than the equivalent land use without trees, and
planting trees may also increase soil carbon sequestration (Oelbermann et al. 2004).
10 The intensity and timing of grazing can influence the removal, growth, C allocation, and flora of grass-lands,
thereby affecting the amount of C in the soils (Freibauer et al. 2004)
11 Organic soils contain high densities of C accumulated over many centuries because decomposition is
suppressed by absence of oxygen under flooded conditions. To be used for agriculture, these soils are drained,
which aerates the soils, favoring decomposition and, therefore, high CO2 and N2O fluxes.
20
23. The technical potential for mitigation options in agriculture by 2030, considering all gases, is
estimated to be between 4 500 (Caldeira et al. 2004) and 6 000 Mt CO2e/year (Smith et al.
2008). Figure 2.2 below provides rough estimates of mitigation potential from all agricultural
sources by region.
Figure 2.2: Technical mitigation (all practices, all GHGs: MtCO2-eq/yr) by 2030
Source: IPCC 2007, figure 8.5
The global and regional potential of the four most important sources of terrestrial mitigation
are summarized below.
• Cropland management: High global potential, spread over the regions. In terms of food
insecure regions, potential mitigation is particularly high in South America, Eastern Africa,
South Asia and Southeast Asia.
• Pasture and grazing land management: Despite the low C density of grazing land,
practices in this category have a high potential for C sequestration because of the large
amount of land used as pastures. Data from FAOSTAT indicate that global pasture area
accounted for 3 488 Mha in 2002 (69 percent of global agricultural land). On the other
hand, conversion of pasture accounted for 65 percent of the increase in arable land from
the 1960s to 2005. Improving pasture efficiency, therefore, will avoid further land
conversion and concomitant C loss. According to IPCC (2007), potential gains are
particularly high in almost all regions of Africa and Asia, as well as South America.
• Restoration of degraded land: Oldeman (1994) estimated that over 2 billion hectares of
land were degraded. Degraded land due mainly to erosion was calculated to affect 250
Mha, including 112 Mha in Africa, 88 Mha in Asia, and 37 Mha in Latin America (Oldeman
1994). Thus, there is a large potential to increase carbon sequestration in South America,
East and West Africa and South and Southeast Asia through mitigation options falling
within this category.
• Restoration of organic soils: These carbon dense soils are often important in developing
countries; for example, Andriesse (1988) estimated that the South East Asian region
contains the largest expanse of peat deposits. The second most important area is the
Amazon basin and the basins bordering the Gulf of Mexico and the Caribbean. These
soils are also found in the wet equatorial belt of Africa.
21
24. 2.5 Costs
A key consideration is the costs of achieving potential adaptation, food security and
mitigation benefits from the selected set of changes in agricultural practices. This is critical
in determining which synergies to pursue and which trade-offs can be effectively minimized.
There are wide ranges in cost estimates by different sources, reflecting the large differences
among regions and the type of costs considered in the analyses. For instance, McKinsey
(2009) provides cost estimates for mitigation from crop and grassland management,
restoration of organic soil, and restoration of degraded land. Average costs per tonne of
carbon dioxide equivalent (CO2e) abated to the year 2030 are computed to be negative for
crop and grassland nutrient management and tillage and residue management, indicating
that these activities should generate higher benefits than costs over the time frame
considered. While this analysis is useful in indicating which practices will be self-sustaining
in the long-run, it does not indicate the magnitude of the initial investments required to
make the changes, which is a main barrier to implementing many of these practices.
The few project-level costs that are available show very wide ranges due to differences in agro-
ecological conditions as well as pre-project land uses and household asset endowments.
Because these costs are often largely ignored, table 2.3 presents some project-level
estimates of up-front establishment costs associated with the adoption of practices.
In certain cases, agronomic measures such as nutrient management or tillage/residue
management have low or zero establishment costs. Nevertheless, in some cases major
investments are still needed, e.g. to buy a special no-till drill to simultaneously seed and
fertilize annual crops, as in the Morocco case study referenced in table 2.3. Establishing
water harvesting structures may be costly but these technologies are often easy to maintain
and represent a common practice worldwide. Soil and water conservation structures often
require relatively high up-front costs in terms of labor and/or purchased inputs.
Establishing agro-forestry systems requires labor costs for land preparation (which vary
largely according to slope) as well as input costs for purchasing tree seedlings and
fertilizers. Restoration of degraded lands can entail particularly high establishment costs
that include labor and equipment needed to construct soil and water conservation
structures, expenditures on seeds and seedlings for grasses and trees, and for
incorporation of organic and inorganic fertilizers (Wocat 2007, Lipper et al. forthcoming).
These costs constitute a potential adoption barrier as smallholders often lack resources to
make the investments needed to realize higher yields and positive net benefits in the longer
run. For example, nutrient management is estimated to be highly net-profit positive on
average due to a reduction in fertilizer use, and tillage management is expected to lead to
a reduction in labor and fuel costs that offset increases in weed control costs at a global
scale (McKinsey 2009). However, there are many other barriers to adoption of sustainable
land management practices, which are well documented in the literature (WB 2007,
Nkonya et al. 2004, Barrett et al. 2002, Otsuka and Place 2001, McCarthy 2004). These
barriers include not only limited credit to finance up-front costs, but also issues related to
access to information, property rights and tenure security; lack of access to effective
research and extension services for capacity building and technical assistance; limited
access to insurance; and lack of access to markets. More extensive and country-specific
analysis of costs will be needed in future.
22
25. Table 2.3: Adoption costs of mitigation technology options
Technology options Mitigation potential in Practices Case study Establishment costs
developing countries (1)
Mt CO2e/ha/year US$/ha
Improved cropland warm moist: 0.33-3.93; Improved agronomic Natural vegetative strips, 84
management warm dry: 0.62-5.36 practices The Philippines
Small level bench terraces, 275
Thailand
Fanya juu terraces, Kenya 320
Vetiver grass contour lines, 140
South Africa
Integrated nutrient Compost production and 12
management application , Burkina Faso
Improved trash lines (weed n.a.
and crop residue), Uganda
Tillage/residue No-till technology, Morocco 600
management
Small-scale conservation
tillage, Kenya n.a.
Water Management Enhanced runoff harvesting 88
for olives, Syria
Water harvesting on cropland 240
and grazing land, India
Agroforestry Grevillea agroforestry system, 160
Kenya
Belters of trees for farmland, 125
China
Improved pasture warm moist: 0.81; Improved pasture Grassland restoration and 65
and grazing warm dry: 0.11 management conservation, Qinghai
management province, China (2)
Improved grazing Area closure for 390
management rehabilitation, Ethiopia
Restoration of 3.45 Reclaim soil productivity Restoration of degraded 230
degraded land rangeland, South Africa
(1) Latin America and Caribbean, Africa, South and Southeast Asia
(2) Project estimates
Source: adapted from Wocat 2007 and IPCC 2007
2.6 Mitigation and food security:
where and how can synergies be realized?
The key regions that require urgent action to reduce food insecurity and build adaptation
capacity are Central, East and West Africa, many countries in South and Southeast Asia, the
highlands in South America, and certain regions of Central America and the Caribbean.
A comparison of the practices listed above with those analyzed in table 2.2 shows that
nearly all of the terrestrial-based agriculture mitigation options are the same as those
proposed for sustainable land management and adaptation to climate change. The
potential for synergies is particularly high for changing food production practices such as
improved crop varieties; avoiding bare fallow and changing crop rotations to incorporate
food-producing cover crops and legumes; increasing fertilizer use in regions with low N
content (as in much of sub-Saharan Africa), and adopting precision fertilizer management
in other regions; seeding fodder and improved forage quality and quantity on pastures
23
26. expansion of low-energy irrigation; and, expansion of agro-forestry and soil and water
conservation techniques that do not take significant amounts of land out of food
production. Trade-offs are more likely when mitigation options take land out of production,
either temporarily or permanently. For instance, restoration of degraded lands often
requires that land not be used for production at least in the short-term, whereas avoiding
draining or restoring wetlands would directly take land out of production permanently.
Trade-offs may also be important for certain stocking rate and rotational grazing practices.
By combining information from table 2.2 with estimates of mitigation potential by practice,
it is possible to derive a chart of the synergies and trade-offs between mitigation and food
security for specific practices and regions as shown in figure 2.3 below. Because impacts
will vary by agro-ecological conditions, historical land use, and current production systems,
the chart is provided only to illustrate the potential synergies and trade-offs that might
occur in any one location. Additionally, to simplify the chart, we consider the long-term
benefits to food security in order to locate a particular practice on the chart, though it is
important to recognize the short-term trade-offs that may occur. For example, changing
from continuous cropping to improved fallow can generate moderate mitigation and food
security benefits in the long term, though food production may fall in the short run.
Restoration of crop and grazing lands can generate high mitigation and food security
benefits, though short-medium term food production losses can be significant depending
on the restoration strategy pursued. Irrigation can have very high food security benefits, but
may have limited mitigation benefits (or even lead to increased emissions) where irrigation
is energy intensive. Conservation and organic agriculture could be win-win, or represent a
trade-off between mitigation and food production, depending on the specific use and value
of crop residues and the capacity to manage weeds. Finally, management of organic soils
yields very high carbon benefits, but low (and potentially negative) food production benefits.
Further research is needed to derive such charts to capture the specific characteristics of
different areas.
Figure 2.3: Examples of Potential Synergies and Trade-Offs
Food
Security Food Security Potential: High Food Security Potential: High
Potential Carbon Sequestration Potential: Low Carbon Sequestration Potential: High
• Expand cropping on marginal lands • Restore degraded land
• Expand energy-intensive irrigation • Expand low energy-intensive irrigation
• Expand energy-intensive mechanized • Change from bare to improved fallow
systems • Agro-forestry options that increase food
or incomes
• Conservation tillage and residue mgmt,
where limited trade-offs with livestock
• Improved soil nutrient management
Food Security Potential: Low Food Security Potential: Low
Carbon Sequestration Potential: Low Carbon Sequestration Potential: High
• Bare fallow • Reforestation/afforestation
• Continuous cropping without use of • Restore/maintain organic soils
organic or inorganic fertilization • Expanding bio-fuel production
• Slope ploughing • Agro-forestry options that yield limited
• Over-grazing food or income benefits
• Conservation tillage and residue mgmt,
where limited trade-offs with livestock
Carbon
Sequestration
Potential
24
27. The key findings of the chapter are:
• There are a wide range of agricultural investment options that improve food security,
increase the adaptive capacity of the food system to respond to climate change, and also
contribute to mitigation.
• Synergies differ across localities, and thus a necessary first step is to identify where the
potential synergies and trade-offs occur in specific circumstances.
• Even where significant trade-offs between food security and mitigation might occur from
a proposed land use change, it is important to determine if there are opportunities to
minimize such trade-offs.
• The costs of adoption and implementation also vary by locality, and can be significant for
both investment and opportunity costs.
25
28. 3
Enabling action on food security and
climate change mitigation: financing options
Current financial resources to support changes in agricultural systems to feed the world are
insufficient, while the main financing mechanisms for climate change mitigation largely
exclude agriculture. This section of the paper looks at financing options – public, public-
private and carbon markets – for actions that address the dual goals of food security and
climate change mitigation from agriculture in the context of sustainable agricultural
development.
There are several options for financing mitigation actions currently under negotiation that
vary in suitability for agricultural mitigation across different countries. These foresee the use
of public and private sources of finance, including market mechanisms, and range from
project to sectoral levels. One of the key issues associated with establishing financing
mechanisms for mitigation is the establishment of systems to measure, report and verify
mitigation actions and outcomes. The type and cost of MRV systems could vary by
financing source. This chapter discusses some of the main MRV options in the context of
various financing mechanisms and their potential for application in agricultural mitigation
actions in developing countries.
3.1 Agricultural investment requirements vis-à-vis climate financing
In the framework of the FAO work on “How to Feed the world in 2050”, Schmidhuber et al.
(2009) estimate that cumulative gross investment requirements for agriculture in developing
countries add up to nearly US$9.2 trillion until 2050 or nearly US$210 billion annually12.
Comparing this with the estimate of the total annual value from the four major mitigation
categories (crop and grazing land improvements, organic soil and degraded land restoration)
in non-OECD countries of 1.5 Gt/CO2e/yr13, and valuing these at $20/t CO2e, US$30 billion
could potentially be generated annually through agricultural mitigation (IPCC 2007). This very
rough estimate indicates that carbon finance could be a significant, although insufficient,
source of funds for agriculture in developing countries that needs to be taken into account
in agricultural planning and policy. Further value can be captured by integrating the
investments needed for agricultural development and agricultural mitigation. Potential areas
of overlap and savings still need to be quantified, however.
The estimates above also indicate the potential limitations of carbon finance in agricultural
investment needs: carbon finance may never contribute more than 15 percent of the
overall agricultural investment needs. Considering the strength of the financial muscle of
agricultural carbon finance, a combination of long-term international ODA and carbon
finance could finance programmes to:
• Leverage public and private investment in adopting sustainable and resilient forms of
agricultural production that also enhance mitigation as well as other ecosystem
12 This estimate, like those presented in chapter 2, assumes an 11 % per capita calorie increase and food
insecurity remaining at 4 % of the population by 2050. About 39% of the investment demand is in China and
India, 61 % has to be invested in agriculture across all other developing countries. Investment costs for agricultural
research, rural infrastructure and capacity to trigger the transition are not included. Costs for bringing degraded
land into production are also not considered.
13 Economic agricultural mitigation potential: for cropland improvement incl. rice management 0.62 MtCO 2e/yr.,
grazing land improvements 0.62 MtCO2e/yr, organic soil restoration 0.17 MtCO2e/yr, and restoration of degraded
lands 0.17 MtCO2e/yr, (IPCC, 2007)
26
29. services. This includes agriculture in ecological zones that have a large sequestration
potential and are important for human survival such as watersheds of major rivers and
areas with high biodiversity.
• Remove investment barriers for adopting management activities that have substantial
long-term food security, agricultural productivity and climate benefit gains, such as
restoring degraded lands in high productivity zones.
• Improve food security in climate sensitive areas of LDC countries.
In order to mobilize long-term public and private finance for agricultural mitigation and
development from public and private sources, different financing mechanisms related to
international sources of funds will be needed. To enable these sources of financing, a
regulatory framework and enabling conditions for investments are required. A range of
options for financial mechanisms are briefly introduced below.
Climate financial mechanisms
Securing adequate and sustainable sources of international finance to support the
adoption of mitigation activities in developing countries is a major issue in the climate
negotiations. Climate change financing is not about aid with donors and recipients, but
cooperative public and private action considering common but differentiated
responsibilities (Neuhoff et al. 2009). Different financing mechanisms have to be
coordinated to reach the scale required to meet agricultural production and climate
change challenges. Criteria for assessing the financing options include the need to
address issues of equity, differentiated responsibilities and regional representation and
relevance. Financing can play two main functions in the implementation of agricultural
mitigation actions:
• Direct finance to cover incremental costs of implementation, which can include
capacity development, or financing to overcome agricultural mitigation adoption
barriers such as capital access for smallholder farmers and agricultural inputs and
opportunity costs associated with adoption (see chapter 2).
• Facilitating financing to establish the conditions and incentives for other stakeholders to
invest in agricultural mitigation. This can include the development of robust policy
frameworks that facilitates smallholder access to land and capital such as micro-finance
schemes. Facilitating financing could be used to enable private sector financing as well.
These two forms of finance can support three main categories of mitigation costs:
• Up-front finance, in particular from developed countries, is necessary to develop a
public-private financing architecture. Up-front financing is crucial for capacity building but
also for smallholder farmers to obtain agricultural inputs to increase yields and enhance
carbon sequestration. However, to maintain improved long-term agricultural practices,
up-front finance has to be combined with finance provided during operations.
• Operations financing can be generated through the cash-flow from the up-front
investment or the adoption of the mitigation action. Extension is an important service
that can benefit from operational financing to improve the uptake of research and to
ensure that research is demand driven. Payments for ecosystem services are one
potential source of operation finance as shown by experiences in a number of
developing countries.
• Risk coverage is particularly important to facilitate the adoption of new technologies
and to mitigate climate risk.
27
30. Financing mechanisms can also be supportive of the transition to nationally appropriate
forms of climate smart development. Agricultural mitigation has considerable potential to
address equity and regional representation issues: it is one of the most relevant types of
mitigation actions open to least developed countries and its implementation can affect the
poorest segments of the populations. The following section reviews the major financing
mechanisms under negotiation for mitigation in developing countries within the framework
of agricultural mitigation.
Climate financing sources
One of the main issues under negotiation is how to support mitigation actions, particularly
in developing countries. Several options are on the table. For example, financing could be
provided from a multilateral fund on climate change receiving the proceeds from a carbon
tax on international aviation, maritime transport or from auctioning Assigned Amount Units
(AAUs). While a comprehensive analysis of the various options for financing mitigation
actions in developing countries is outside the scope of this report, considerations of how
mitigation finance could be linked to ODA is clearly critical given the analysis of the
potential role of agricultural mitigation finance presented above.
Financing of agricultural mitigation should derive from new and additional resources. ODA
for agriculture is not intended for financing agricultural mitigation, but could be directed at
actions that will contribute to agricultural development and food security and facilitate the
implementation of mitigation actions. ODA could be used to provide budget or sectoral
financing support for capacity building for developing changes in agricultural production
systems that are likely to generate food security as well as mitigation benefits. Uncertainty
and fluctuations in public and private funding (including markets) indicate the need to identify
means for achieving long-term sustainable financing mechanisms to attain and maintain
desired levels of agricultural mitigation and agricultural development. Utilizing multiple
funding streams, including mitigation financing mechanisms, whether fund or market-based,
could offer this potential.
Climate financing vehicles for agricultural mitigation in developing countries
Agricultural mitigation actions could be high priority candidates for Nationally Appropriate
Mitigation Actions (NAMAs) in LDCs, where agriculture constitutes a highly climate sensitive
and economically important sector of the economy. In higher income countries with more
diversified economies, agriculture-inclusive NAMAs also have significant potential to
contribute to emissions reductions while improving incomes and livelihoods of some of the
poorest sectors of the population. Due to their multiple benefits and the need for strong
technical and institutional support in the agricultural sector, agriculture-inclusive NAMAs may
require an integrated approach with agricultural policy and development at the country level.
Most critical for developing countries is that NAMAs or any other agricultural mitigation
financing mechanism must have national ownership and be supportive (or at least not
harmful) to national development processes. The different financing vehicles to be
considered are listed below. See annex 7.7 for more background on NAMAs for agriculture
land management in developing countries.
Possible establishment of dedicated funds for mitigation in developing countries: Some
agricultural mitigation activities with positive impacts on food security will not be
appropriate for financing from carbon markets or private sector due to high transactions
costs or other investment barriers. Limited capacity in many countries and regions will also
limit the extent to which market approaches could be utilized, at least in initial phases of
development. For these reasons it may be necessary to finance agricultural mitigation
28
31. activities through global multilateral climate funds. Some possible options include: the
establishment of one global climate fund, or funds specifically dedicated to agricultural
mitigation within or outside the global fund. There are various proposals for how this fund
could be established and managed. For example, Mexico has proposed the establishment
of a Green Fund, to be financed by contributions from all countries according to the
principle of common but differentiated responsibilities. Factors that need to be considered
include the potential for establishing long-term and reliable funding sources, the potential
for conflicts due to multiple fund objectives and the need for specific financing procedures
to support agricultural mitigation.
Linking with carbon markets: Relying solely on public finance significantly reduces potential
financial resources for agricultural mitigation. Therefore a step-wise approach to linking
NAMAs to carbon markets could be considered. This could be based on country capacity
and experience, where certain countries, regions or activities are only considered eligible for
non-market funding sources, while other countries and sectors with high capacity and
experience with carbon markets are allowed to tap into market sources of finance.
Linking to Reducing Emissions from Deforestation and Forest Degradation (REDD) plus
mechanism: Financing for agricultural mitigation could be integrated into REDD plus funding
sources and/or eventual financing NAMAs (if REDD plus is integrated into NAMAs), possibly
including existing Clean Development Mechanisms (CDM). However, as the development of
a REDD plus financing mechanism is well advanced and financing requirements are different,
this option could result in the marginalization of agricultural mitigation actions and not
capture their full benefits. Linkages between different land-based mitigation actions could be
explored by designing similar but parallel phased funding and implementation mechanisms
for forest and agricultural land-based mitigation.
3.2 MRV requirements for different financing options
MRV systems are needed to ensure the environmental and social integrity of mitigation
actions. MRV systems vary depending on their scale and degree of confidence associated
with the estimates they provide. The costs also vary depending on these same factors, as
well as by different types of mitigation actions (See box 3.1 for a discussion on measuring
changes in soil carbon stocks and annex 7.2 for a detailed discussion of MRV for
agriculture mitigation). In this section, existing and proposed MRV options for various
financing mechanisms are presented and discussed in relation to their application to
agricultural mitigation actions. This is followed by a brief overview of the cost implications
related to different MRV systems.14
3.2.1 National GHG inventory
The IPCC Good Practice Guidelines (2003) for land use, land-use change and forestry
(LULUCF) published detailed GHG inventory and monitoring guidelines for all land-based
emissions and removals. National GHG inventories are needed to monitor the impact of
mitigation action at sectoral level in the framework of internationally supported NAMAs.
National soil GHG inventories based on Tier 1 approaches require quantitative information
on land use, management and climate and soils distribution in order to predict carbon
14 The background and context for outlining options contained in this section were provided by the following
documents: Ellis and Moarif (2009) highlighting what needs to be MRVed with a focus on the different metrics and
reporting intervals; Breidenich and Bodansky (2009) on legal context of MRV requirements; McMahon and Remi
(2009) on the different MRV country positions in the climate negotiations; and UNFCCC submissions by parties.
29
32. Box 3.1. Measurement of soil carbon stock changes
Advanced capabilities exist on reliable and cost-effective systems for measurement and monitoring
of agricultural soil carbon (C) stock changes and nitrous oxide (N 2O) flux. Priority investment needs
are to develop a limited but high-quality network of soil benchmark monitoring sites and to develop
improved software packages that help integrate geospatial data (climate, soils), management
activity data and appropriate soil carbon models.
Options to quantify soil C stock changes for implementing MRV for agricultural soils include:
1) direct measurements of soil C changes; and 2) a combination of activity-monitoring and
C estimation models. A brief description of the approaches is detailed below.
Direct measurement: Overall, the technology to accurately measure soil C contents exists and is
widely available at reasonable cost15. Thus the challenge in measuring SOC stock changes is not in
the measurement technology per se but rather in designing an efficient sampling regime to estimate
soil C stocks at field-scales. The spatial variability of SOC is often high (Robertson et al. 1997) and
the amount of C present in the soil (i.e. background) relative to the change rate is typically high; thus
there is a low ‘signal to-noise’ ratio. Hence a 5-10 year period between measurements is typically
needed to adequately detect the cumulative change (Conant and Paustian 2002; Smith 2004).16
Integrated activity monitoring and carbon modeling approaches: These approaches build off of
field monitoring data and mathematical models of how soil carbon changes in response to specified
changes in land use and management. There is considerable knowledge on the general responses
of soils to management and land use change, primarily derived from long-term field experiments 17.
A number of reviews, syntheses and meta-analyses of agricultural soil C stock dynamics have been
published in recent years (Ogle et al. 2004, 2005; Paustian 1997ab; West and Post 2002)
summarizing these data and providing estimates of soil C change for various management
practices. This integrated approach is used in national-level soil C inventories reported to UNFCCC
(Lokupitiya and Paustian 2006) and for project-level accounting (Antle et al. 2003; Smith et al.
2007). However, there are limitations in these approaches that need to be addressed to increase
the accuracy of agricultural MRV approaches over time.
stock changes related to land use change and the adoption of certain management
activities. Default values for carbon stocks and stock change factors, for specific land use
and management options (i.e. activity-based default values) are provided by IPCC (2006).
Moving from Tier 1 to Tier 2 requires country-specific estimates of carbon stocks, stock
change factors and emission factors. Tier 3 approaches require the most detailed
environmental and land use and management data. In most cases, available data, e.g.
through FAO and in-country sources, are sufficient for Tier 1 estimates but capacity and
resources for compiling and analyzing the information is the main limiting factor. For higher
tiered approaches, additional data collection and research capacity is needed beyond
what currently exists in most non-Annex I countries18 and may entail significant costs. See
annex 7.5 for a list of FAO sources of data relevant for MRV.
15 Sample analysis costs for automated CN analyzers in the US are typically in the range of $3-4/sample. The
main costs measurements once samples have been taken from the field is involved in sample preparation, i.e.,
sieving, drying, grinding, weighing, much of which involves hand labor – hence sample preparation costs are
largely determined by local labor costs.
16 These remeasurement intervals are similar to those used in forest inventories for determination of biomass
increment.
17 There are a few hundred long-term field experimental sites globally, in which soil carbon has been measured
(for up to several decades) in replicated management treatments consisting of crop rotations, tillage management,
fertilizer levels, irrigation and manuring, often with more than one treatment variable in combination. The majority of
these are located in temperate regions (e.g., Europe, North America, Australia/New Zealand), but a large number
long-term experiments with measurements of soil C also exist in China, India, and South America, but only a few
such sites in Africa.
18 However, many of the larger non-Annex I countries (e.g. Brazil, China, India, Mexico) have the scientific
infrastructure to support higher tier inventory approaches.
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33. 3.2.2 MRV for NAMAs
It has been suggested that NAMAs could provide an over-arching structure of different
action categories:
• actions undertaken by developing countries and not enabled or supported by developed
countries (unilateral mitigation actions);
• actions supported by a fund and financed by developed countries (supported mitigation
actions); and
• actions that are undertaken to acquire carbon credits (creditable and or tradable
mitigation actions)19.
Depending on the NAMA category, varying levels of detail and accuracy for MRV might be
appropriate. A minimum set of MRV obligations might be required for unilateral actions, if
they are to be internationally recognized. For actions supported by developed countries
additional MRV responsibilities may be necessary to ensure that the investments have the
desired climate impact. Finally, substantial MRV capacity has to be first established before
robust MRV systems can operate that enable NAMA crediting and trading mechanisms.
3.2.3 MRV for crediting and trading approaches
There is a wide spectrum of possible approaches ranging from public funded policies to
crediting mechanisms, with the latter mirroring some of the proposals being made under
CDM reform.
The main options for crediting agriculture mitigation under sectoral mechanisms are related to:
• Programme of activities (PoA) using regional baselines; and
• Sector, or potentially sub-sector approaches based on crediting or trading approaches
(e.g. lose or no-lose targets)
Bottom-up accounting methodologies developed for specific mitigation activities under the
CDM could be used to provide guidance on:
• the methodology applicability conditions;
• the baseline, i.e. carbon stocks and carbon stock changes in a without-project scenario;
• estimating emission reductions and removals for the project scenario; and
• monitoring the emission reductions and removals.
The development of land-based agricultural mitigation methodologies could adapt these
existing approaches, with consideration of specific agricultural mitigation characteristics.
Baseline development procedures could be informed by the ongoing relevant REDD
initiatives. The principal approaches that are important pre-conditions to ensure the
environmental integrity of agricultural mitigation, i.e. to prevent leakage and ensuring
permanence and additionality, can also benefit from the experience in the forestry sector
and the evolving voluntary carbon standards. Considering that land-based accounting may
move towards a comprehensive landscape approach (see FAO 2009b), the terminology
introduced in the context of REDD could be used (Angelsen et al. 2009).
One of the most promising crediting approaches for agriculture is a programmatic approach,
also referred to as program of activities (PoA). Activities based on a single approved
methodology can be adopted independent from the sector as a whole and activities can be
implemented by different operators, e.g. from the private sector or NGOs in a specific
geographical region. Compared to stand alone projects, individual activities do not have to
19 http://unfccc.int/files/meetings/ad_hoc_working_groups/lca/application/pdf/mitigation1bii140808_1030.pdf
(page 4 referring to negotiation text page 94: alternatives to paragraph 75, alternative 2).
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34. BOX 3.2: Concept for a rangeland management PoA in China
Rangelands cover about 400 million ha or more than 40% of China’s territory, and nearly the same
proportion of the Earth’s land area. In China, as elsewhere, large areas of grassland are degraded
due to unsustainable management practices. McKinsey and Co (2009) concluded that adopting
sustainable grassland management and restoration practices in China is the most important
abatement opportunity in China’s agricultural sector up to 2030, with an abatement potential of 80
million tonnes of CO2e.
In provinces like Qinghai, with about 36 million ha of grasslands, a PoA management approach could
include a regional baseline established at the province or the prefecture level20 while project activities
could be implemented at county level. Close horizontal and vertical coordination between government
agencies and an integrated planning and funding mechanism would be required. Activity monitoring
information could be also aggregated at prefecture level. Carbon modeling to predict the mitigation
potential of certain management activities could be produced by local research institutes. At village
level, community organizations and village committees with technical support from the county
grassland management station could conduct participatory land-use planning. The planning process
would define the carbon baseline and the management activities that can be adopted to achieve the
dual goal of restoring soil carbon stocks while increasing household incomes.
demonstrate additionality or be individually validated, and a regional baseline could be used
for land-based activities. This would dramatically reduce carbon related transaction costs.
The approach provides the flexibility to up-scale promising agricultural mitigation activities,
e.g. sustainable rangeland management over millions of hectares, while benefiting from the
reduced transaction costs of the programme framework. Furthermore, the different
approaches are already eligible with CDM crediting mechanisms and thus can be linked to
existing trading systems.
3.2.4 MRV for support
Developing countries need support to adopt mitigation actions, reflecting country-specific
needs and capacity. Financing can be either provided via dedicated multilateral or bi-lateral
agreement, and requires a mechanism to trace and monitor support. One option is to build
on a system used by the Development Assistance Committee of the Organisation for
Economic Co-operation and Development (OECD-DAC) to track all ODA provided by its
members. Different options to quantify the support provided would need to be examined.
Capacity support and technology could be valued at cost, i.e. at research or expert input
costs, priced at market value or by valuing the resulting mitigation and adaptation impacts.
3.3 Economics of MRV
The costs associated with different MRV systems in particular will affect which activities
should be pursued in order to gain carbon credits versus those that could be financed
through public sources – either national or international. Additional costs include the
transactions costs associated with enabling farmers to adopt low-carbon strategies, as
discussed in section 2. To highlight the relationship between financing and mitigation
potential, figure 3.1 below illustrates how costs of adopting, monitoring, reporting and
verifying carbon mitigation activities influence the nature of financing as the potential to
20 In Huangnan Prefecture, Qinghai Province, where Government agencies together with FAO, ICRAF-China and
the private sector are exploring opportunities for rangeland mitigation activities, grasslands cover 3.5 million ha
(85% of the prefecture’s land area). The target county, Zeku County, has 0.65 million ha of grassland covering 98%
of the county’s land area.
21 In terms of sequestration, the amount sequestered per year will change each year until saturation levels are
reached. This simple graph can best be thought of as representing the average increases per hectare per year.
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